Developing new products A Gillette case study

First mover: advantages and risks

The Gillette Company has a long history of being 'the first to market...' in its own areas of operation. Its achievements include producing the first successful:
• • • • • • • •

safety razor 1901 twin bladed razor 1972 twin bladed disposable razor 1976 pivoting head razor 1979 pivoting head disposable razor 1980 razor designed specifically for women - Sensor 1992 triple blade razor - Mach 3 1998 battery powered razor - M3Power 2004.

As well as being first to market, Gillette has also continuously produced products which feature improvements to existing technologies, including 3 bladed disposables and ergonomically superior handle developments, including Sensor, Venus Divine and M3Power.

This timeline above also demonstrates how the speed of innovation has accelerated with shorter and shorter gaps between new introductions and superior products. Being 'the first to' can bring advantages known as 'first mover advantages'. These include being able to generate initial consumer interest via both media investment and accompanying press and PR coverage. This then leads to the main retail stores displaying the products in-store and supporting the products with powerful promotional campaigns.

For as long as products remain the only one of their kind available, the 'first mover' can establish loyalty and reputation in its brands before potential competitors get going or catch up. A Brand is thus created.

g. This usually involves a great deal of research.There are risks to being the innovator. and in more than one form. This involves converting a good idea into a product design and then discovering whether modern technology is able to reproduce it to the high specifications required and in the quantities needed. this data gives a broad view of the information.g. however. That involves asking the right questions of the right people. This is done via research. people who shave. • Qualitative research. the innovation process has to be conducted thoroughly. manufacturers produced products and then tried to sell them to consumers. . Researching and developing a new product Properly conducted market research will identify the kinds of new. To be successful. For example. Usually a firm will produce prototypes that can be test marketed on a representative sample of potential consumers. As well as being first to market. This generates a core understanding of HOW consumers use razors and what they think about the experience. what products do they buy? From consumer research the company moves into technological research and development. • Quantitative research. e. Venus Divine and M3Power. the product can then be refined and developed until it is as good as it can be. using a questionnaire with a large. including Sensor. improved products that consumers would switch to if they become available. working with several small focus groups comprising. how many people shave. including 3 bladed disposables and ergonomically superior handle developments. e. In the light of their reaction. what do they use to shave. for example.representative sample of people. There are two main approaches to market research. In the past. and also placing a proper interpretation on their answers. Gillette has also continuously produced products which feature improvements to existing technologies. and discussing with them what they look for in a razor/blades/shaving system. Successful organisations find out what the consumer wants and then produce this product for them. looking more at the numerical objective data rather than the more subjective data acquired via qualitative research.

for self-adhesive labels. or the cost of setting up and operating the production process. the fact that competitors bring out products to challenge the original idea. Beating the competition and growing the business In order to guide itself and ensure the entire company is aligned in its objectives. but it is impossible to prevent other firms coming up with their own interpretation and application of the original good idea e. That's true of many . It is important to internal audiences i. any business must be careful in estimating potential sales.e. Patents can protect products. Gillette's vision statement reads: 'To build total brand value by innovating to deliver consumers value and customer leadership faster. In essence. better and more completely than our competitors. the rival may not be as creative but is better at managing their overall business. Ironically.Within the original research and analysis. "Will this proposed new venture generate profits for the company?" Many businesses have come unstuck by wrongly believing the answer to be "Yes". A successful product will generally attract competition. is generally good for that category because the market becomes stimulated and total sales can increase. • 'Delivering value' to consumers is not necessarily about being the cheapest. Usually. This is why product improvement through innovation in both concept and design has to be ongoing. so they all know in which direction to pull. there is also another vital question which needs to be asked. It is also important to external audiences such as the retailers who buy from Gillette and sell the products to consumers.g. an organisation often develops a vision statement. improved products that consumers would switch to if they become available. Generally speaking. This is also why Gillette have remained at the forefront of the shaving industry for the last century.' The component words really do matter. or subsonic aircraft. but about earning a reputation for high quality products that represent good value for money. or both. shavers. A vision statement is intended to convey what the organisation 'is all about'. such businesses either underestimated the investment levels required for research and development. some organisations may get into financial difficulties if they are overly optimistic in their planning which may result in them going bankrupt or being acquired by a better managed rival. Properly conducted market research will identify the kinds of new. Gillette's staff.

over the years. subtly different ways. speed of response to changing market conditions can be vital to success. It also involves helping customers to obtain maximum value out of their purchases e.g. including product guarantees..' can lead to poor sales and low market share. • 'Customer leadership' involves discovering what customers most want and then finding ways to fulfil those wants. Leading the way with a firm focus on consumer needs. disappoints initial purchasers. The company recognised that rising incomes would lead consumers to spend more on a 'total package' that enhances personal appearance. In the UK an increasing number of men have switched from disposable razors to shaving systems which fuels the market demand for handle and replaceable blades. feeling good' is a many-staged process of personal grooming. the needs of which have to be met in carefully targeted.. • Aiming to be 'better' recognises that there are no gains from being first with a big breakthrough if the innovative product performs poorly. The market for razors is not one uniform market but a market that contains different segments. 'Looking good. better and more completely' represent key targets.. So. Gillette's overall emphasis is on providing premium performance via the best value for money shaving experience. and is rapidly followed by a clearly superior product from a rival firm. • 'More completely' recognises that a razor is just one component of the much broader market of 'personal appearance and wellbeing'.industries.' successfully can also generate intense product and brand loyalty from consumers. whether this is a system razor for the discerning customer seeking the best in .. Being 'first to . As suggested earlier. Aiming to be 'faster' recognises that being 'second to.. by providing supporting literature. and particularly those in which consumers believe there is a direct relationship between price and quality. personal hygiene and as such developed a strategy to expand its position within this expanding market. It is no accident that Gillette is heavily involved in the market for deodorants and antiperspirants. fails to meet the claims made for it. Gillette recognised that different segments of the market are seeking different product benefits. • 'Faster. it has sought to develop several product categories ranging from popular disposable razors to elaborate shaving systems. earns bad professional reviews. sound advice and a good after sales service. of which shaving is just one aspect.

g. Arrange of Braun household appliances including kettles. Right Guard Extreme. Identifying consumers' needs and wants: Gillette Gillette's research shows that in 2002.Systems and Disposables. razors. From this. Mach3. razor blades. As suggested earlier. or a high quality disposable product for people looking for a good quality shave with the convenience of a disposable.the full range of batteries and torches sold under the Duracell brand name Oral care . such as Sensor Excel. Gillette is the market leader in the majority of these areas. shaving creams and gels in 2002 was in excess of £5 billion a year.g. dry shavers. Oral-B manual toothbrushes and Braun Oral-B electric toothbrushes • Electrical appliances . including razors. Gillette has four core business areas. Mach3.shaving technology. with over 80% using a blade and razor. Gillette Series. speed of response to changing market conditions can be vital to success. we can identify two sub segments: • premium shaving systems. Gillette has calculated that the world market for blades. Brands include Gillette. Gillette's staff. • Personal grooming . Personal diagnostic appliances e. coffee makers and food processors. under the ThermoScan brand name. so they all know in which direction to pull.e. hair stylers. Clearly. It is important to internal audiences i. under the Braun brand name. and the company continues to invest in each of these core categories.g. more than 1. Within the systems segment.7 billion men over 15 years old remove hair daily. Gillette's research has also revealed that the primary factors that consumers look for include: Through its market research.dental and oral care products e. Gillette has identified two main segments of the male shaving market . Turbo and M3Power . Natrel • • Portable power . Gillette has grown not only by developing its core business but also by acquiring successful businesses with growth potential in markets related to its core activity. electronic ear thermometers. Right Guard. shaving creams.a range of products using the Gillette brand. Many businesses look to expand into related areas that offer opportunities for growth and also an element of protection through market diversity. hair dryers.domestic items e.

and reliability of its disposable products. It is therefore an entry-level product in the same way for example. eg Blue II. .g. This is because more and more consumers are preferring to move up-market to premium shaving systems. Its scientists. which meet the changing needs of the consumer produce increasingly effective and best in class electric and manual toothbrushes design the ultimate userfriendly ear thermometer. how to: • • • • get the closest and most comfortable shave make longer-lasting batteries. Agilite. a smaller BMW 3 Series represents the first rung on the BMW ladder. Conclusion Gillette has a long. we can now identify a further two sub segments: • • Premium disposables e. For example. Nevertheless. technicians and product engineers are continually trying out new features and production techniques with a view to improving product performance e. whereas at the top end of the market those consumers buying premium shaving systems are looking for all-round top-quality shaving experiences. Gillette wishes to give that consumer the opportunity to shave with the best product possible. Gillette's Blue II and GII products remain key and the company is convinced that consumer satisfaction with its products leads them to continue to buy its products when they are ready to trade up to more sophisticated market segments. or the most technically advanced shaver. The standard disposable razor is still extremely popular but there is a clear trend to system razors. whether a systems product or disposable. distinguished history. such as Contour and GII. such as M3Power and Venus Divine. Gillette's philosophy is very clear in whatever the consumer chooses to shave with.• standard shaving systems. Consumers' benefits depend upon which segment they buy into. consumers in the premium disposable market may be seeking a convenient set of razors to take on holiday. It remains innovative. Gillette's advertising focuses on clarifying premium product benefits.g. Gillette has still improved its market share in this segment because of the quality. Within the disposbables segment. Sensor 3 Disposables Standard disposables. value for money.

Contributed by: Prof. Its scientists.uk . technicians and product engineers are continually trying out new features and production techniques with a view to improving product performance. Ashutosh Pandey & Sarita Srivastav Source: http://businesscasestudies.co.The company's longstanding interest in being 'first to get it right' remains a key element of its continuing prosperity and progress.

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